{198
PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28
I think it is fair to say that the free market system has two
advantages: (1) its simplicity and (2) its effort-releasing effect.
But it has one fundamental shortcoming: it does not assure the
realization of specific preferences, such as a high rate of eco-
nomic growth, a distribution of income and wealth based on
social justice, aid to special social groups, economic develop-
ment of lagging regions within the country, development of
special agricultural and industrial sectors (for defense, health
or humanitarian reasons) etc. The purpose of wise planning is
to realize many such special goals, while retaining as many as
possible of the advantages of the competitive system.
We wish to search for some better economic system to
replace the time-honored system of the free market economy.
But in that search, we encounter a ghost that has been haunt-
ing all of us for the last generations. It has been the same
ghost we have encountered regardless of the direction we have
chosen in our search for a better economic system.
This ghost is human nature itself. Some people are alert,
full of initiative and driving force, full of the active and unsel-
fish desire to apply all their abilities to the economic and social
betterment of their country and to that of mankind as a whole.
But, alas, the percentage of people possessing these virtues is
small, very small indeed. Many people are, more or less, dull
and selfish and can be induced to make a personal effort only
if thereby they can obtain some tangible advantage for them-
selves or to the people close to them. In this connection, the
economic advantage will often stand in the foreground.
Therefore, the historical challenge, facing us as economists
and social engineers, is to help the politicians work out an
economic system built upon a set of incentives, under the im-
pact of which the economic activity will be satisfactory from
the viewpoint of the economy as a whole, even if the behaviour
of many individuals is essentially selfish. We must find a means
of circumventing the human obstacle to human progress.
17] Frisch - pag. 2
